First time Multi-Family Investment

[John Shmon]

I'm looking into purchasing my first multi unit building.  Ideally, I would like something near San Francisco.  Currently learning how to evaluate a property properly.  Looking in the 1M price point or under which can be difficult in the area.  I've always imagined having an investment property (maybe a duplex or single family) in a nice area with a long term family living in it but the numbers I have looked at make more sense to buy in a not-so-great neighborhood with 4+ units.  Any insight for a first time buyer?  

https://www.zillow.com/savedhomes/for_sale/2097367...

As I'm sure is the case with most people on here, I'm looking for a property that is ready to go and I can generate + revenue from the get-go. Per the apt. building in the link provided, the numbers seem solid to me - please note if I'm missing something.

Appreciate any insight you all can offer.

- John

[Andrew Johnson]

@John Shmon Just a quick glance, I'd want to know what they're paying for insurance.   Maybe I'm nuts but I think that pools generally increase liability (fenced or not) and the insurance premium might not be too pretty.  But for basic numbers:

$85,500

-$51,180 per year mortgage ($800K @ 5%)

-$10,000 property taxes

-$8,550 in property managing (using a 10% standard)

-$3,000 in home insurance (just guessing)

That leaves you about $12K, roughly $1K per month for any maintenance (in a 1964 property), owner paid utilities, gardening, etc.

Maybe you end up clearing $500 per month on your $200,000 investment.  That's a 3% cash-on-cash return.  Any kind of cap-ex like an HVAC replacement, resurfacing that pool, dealing with that flat roof, etc. and your upside down (from a cash-flow perspective).  

Anyway, just my 2 cents...